Overall assessment of the economic situation
In the first half of 2022, the KION Group’s position in the market and its technological position allowed it to benefit from long-term megatrends such as e-commerce, energy and transportation solutions, digitalization, and urbanization and to increase both its revenue and the value of its order intake. The sharp fall in adjusted EBIT was largely due to ongoing supply chain disruptions and the continued rise in material prices.
Order intake increased by 13.1 percent to €6,654.8 million (H1 2021: €5,881.7 million). In the Industrial Trucks & Services segment, order intake grew by 20.0 percent year on year to €4,827.2 million (H1 2021: €4,021.1 million), primarily on the back of a jump in new truck business. Order intake in the Supply Chain Solutions segment came to €1,865.2 million, which was virtually at the level of the prior-year period (H1 2021: €1,868.8 million). In contrast with the first half of 2021, order intake in the Supply Chain Solutions segment included more project business with new customers in a range of industries, thereby helping to further diversify the customer portfolio.
Consolidated revenue went up by 11.4 percent year on year to €5,536.7 million (H1 2021: €4,967.9 million). In the Industrial Trucks & Services segment, revenue generated from external customers went up by 10.6 percent to €3,445.3 million (H1 2021: €3,114.4 million). The rise in revenue was held back by ongoing delays in the delivery of new trucks due to shortages in the supply of bought-in parts, especially in the EMEA region. In the Supply Chain Solutions segment, revenue from external customers rose by 13.0 percent to €2,090.2 million (H1 2021: €1,849.1 million). Here too, supply chain disruptions led to delays in working through the sizeable order book. The continued growth of the service business, which was up by 12.8 percent across both segments, contributed to the rise in the KION Group’s revenue.
Adjusted EBIT fell sharply to €311.7 million (H1 2021: €462.2 million). Earnings in both operating segments were squeezed by higher costs for materials, energy, and logistics, and also by inefficiencies resulting from disrupted supply chains. Lower personnel expenses in connection with variable remuneration components had a positive impact on the Group’s adjusted EBIT.
Net income for the period decreased to €159.8 million (H1 2021: €291.2 million). As the number of shares was virtually unchanged, basic earnings per share therefore declined to €1.21 (H1 2021: €2.21). Free cash flow was well into negative territory at minus €591.5 million (H1 2021: €301.5 million). This was partly due to supply chain disruptions and the related significant growth of inventories, especially in the case of unfinished trucks and raw materials. Short-term funding requirements increased as a result. This pushed up net financial debt by €861.6 million to €1,429.1 million as at June 30, 2022, which meant that net debt stood at 0.9 times adjusted EBITDA on an annualized basis.